Annual Energy Outlook 2006 with Projections to 2030 - Usinfo.org

Issues in Focusenvironmental impacts are unknown. Preliminarygeological studies have shown that underground storage,if successful, has the potential to store all the CO 2from industrial and power sector emissions for severaldecades. Major issues include the proximity ofthe geologic storage formations to potential CO 2 productionsites, the long-term permanence of the storagesites, and the development of the monitoringsystems needed to ensure that leakage is limited andcontrolled.In 2005, DOE announced the second phase of sevenpartnerships involving small, field-level demonstrationsto determine the feasibility of carbon sequestrationtechnologies. In one project, ConocoPhillips,Shell, and Scottish and Southern Energy will begindesigning the world’s first industrial-scale facility togenerate “carbon-free electricity” from hydrogen.The planned project will convert natural gas to hydrogenand CO 2 , then use the hydrogen gas as fuel for a350-megawatt power station, reducing the amount ofCO 2 emitted to the atmosphere by 90 percent. TheCO 2 will be exported to a North Sea oil reservoir forincreased oil recovery and eventual storage. Smallerdemonstration projects are already operating in Algeriaand Norway.RenewablesIn the face of international concern over GHG emissions,the eventual peaking of world oil production,and recent volatility in fossil fuel prices, many haveseen promise in exploiting an ever-increasing rangeof renewable energy resources. Renewable energyresources used to generate electricity generally reducenet GHG emissions compared to fossil generation,are accepted as being nondepletable on a timescale of interest to society, and tend to have low andstable operating costs.To date, however, market adoption of most renewabletechnologies has been limited by the significant capitalexpense of capturing and concentrating theoften diffuse energy fluxes of wind, solar, ocean,and other renewable resources. With the most successfulrenewable generation technology, hydropower,nature has largely concentrated the diffuseenergy of falling water through the geography ofwatersheds. The challenge for emerging technologies,as well as those on the horizon, will be to minimizeboth the monetary and environmental costs of collectingand converting renewable energy fuels to moreportable and useful forms.Wind. Through a combination of significant costreductions over the past 20 years and policy supportin the United States, Europe, and elsewhere, electricitygeneration from wind energy has increasedsubstantially over the past 5 to 10 years. In fact, insome areas of Western Europe, viable new sites forwind are seen as severely limited, because the bestsites already are being exploited, leaving sites withpoor resources, too close to populated areas, and/or inotherwise undesirable locations. In response, a numberof European countries have begun to build windplants offshore, where they are more remote frompopulation centers and can take advantage of betterresources. Although firm data on costs has beenscarce, it is believed that offshore wind plants costsubstantially more to construct, to transmit power,and to maintain than comparable onshore windplants.There have been a number of proposals for offshorewind plants in the United States, including at leasttwo under serious consideration for near-term development,off Cape Cod, Massachusetts, and LongIsland, New York. The United States has substantiallylarger and better wind resources than mostcountries of Europe, and thus is unlikely to see itsonshore resources exhausted in the mid-term outlook.Still, localized factors such as State renewableenergy requirements and constraints on electricitytransmission from conventional power plants intocoastal areas may make some offshore resources economicallyattractive, despite the abundance of lowercost wind resources further inland. Because NEMSmodels 13 relatively large electricity markets, it cannotfully account for localized effects at the State ormetropolitan level, and thus is likely to miss the feweconomical opportunities for offshore development ofwind-powered generators.Hydropower. In addition to ocean-based wind powertechnologies, there are a number of technologies thatcould harness energy directly from ocean waters.They include wave energy technologies (which indirectlyharness wind energy, in that ocean waves usuallyare driven by surface winds), tidal energytechnologies, “in-stream” hydropower, and oceanthermal energy technologies.Although a number of wave energy technologies areunder development, including some that may be nearpre-commercial demonstration, the publicly availabledata on resource quantity, quality, and distributionand on technology cost and performance are inadequateto describe the specifics of the technologies. Ahandful of tidal power stations around the world dooperate on a commercial basis, but prime tidalresources are limited, and the technology seemsEnergy Information Administration / Annual Energy Outlook 2006 47